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Perdon Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its...

Perdon Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its annual budg

Perdon Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Perdon is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be allocated to each product line. The information shown below relates to overhead. Walk-in Safes Mobile Safes 200 300 450 800 Units planned for production Material moves per product line Purchase orders per product line Direct labor hours per product line 50 200 350 1,700 (a) The total estimated manufacturing overhead was $272,000. Under traditional costing (which assigns overhead on the basis of direct labor hours), what amount of manufacturing overhead costs are assigned to: (Round answers to 2 decimal places, e.g. 12.25.) (1) One mobile safe $ per unit (2) One walk-in safe $ per unit
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ReportAnswer #1
1 Traditional method
One Mobile Safe $                      435.20
One Walk - in Safe $                  3,699.20
Workings:
Mobile Safes Walk - in Safes Total
(i) Direct labor hours per product line 800 1700 2500
(ii) = (272000/2500) * (i) Estimated manufacturing overhead $                      87,040 $                         1,84,960 $ 2,72,000
(iii) Units planned for production 200 50
(ii) / (iii) Manufacturing overhead cost per unit $                      435.20 $                         3,699.20
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